The San Francisco-based appeals court said the Berkeley and Los Angeles campuses broke promises to freeze fees at the amount the students paid when they first enrolled as the University system created an implied contract when it said on its Web site and some catalogs until 2003 that professional degree fees for students in programs such as law, medicine and business would remain constant during their enrollment. Classes had already begun when UC raised fees in 2003 because of deep midyear budget cuts. With interest, the university owes nearly $40 million.

A spokesman told the Associated Press that the university is considering a further appeal. Friday's appeals court ruling upholds a decision last year by a San Francisco judge. If the university doesn't appeal, the case returns to the lower court to distribute the money. The refunds could be a few hundred dollars to most students, but more than $10,000 for some students at professional schools, said Andrew Freeman, a lawyer for the students.